JPMorgan Assumes GoPro (GPRO) at Neutral

JPMorgan analyst Paul Chung assumes coverage on GoPro (NASDAQ: GPRO) with a Neutral rating.

The analyst comments "Top line remains volatile given the mono product lineup and execution missteps over the years coupled with limited visibility into a seasonally strong 4Q keep us sidelined. We also believe action camera demand upside is somewhat limited to 4mm annual units at most per year and increasingly more dependent on upgrades from the niche customer base, as more mass market consumers prefer the simplicity of the smartphone camera. Further the strategy shift to direct-to-consumer will weigh on overall shipments in our view given the culling of retail partners on the fringe. That said, we are incrementally positive on the path toward profitability driven by material opex cuts and the shift in strategy that should benefit gross margins driving more consistent PF EBITDA over time. We take 3 scenarios: Good, Better, Best based on camera unit sales to get a better idea of the trajectory of the business."

For an analyst ratings summary and ratings history on GoPro click here. For more ratings news on GoPro click here.

Shares of GoPro closed at $4.50 yesterday.

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